Enthusiasm for Meta's Muse reignites parts of AI trade

Welcome to the Saxo Market Call. Before we get started, it's important we emphasize that the views and opinions expressed in this podcast are those of the hosts and guests and do not constitute investment advice or recommendations. All information provided is for educational and entertainment purposes only. Okay, just a little brief break here before we get started with the podcast. I actually recorded, was finished recording today's podcast and in steps Uwe Henson, our head of commodity strategy, with some hot breaking news that's really changing the backdrop here. So I felt like it'd be good to get you in here, Uwe, just to describe what the news item you saw was and its impact on the markets, which does put quite a different spin on the whole podcast. Today, we'll see if the news holds, but apparently is it only from this Kyoto, is it a news agency of some kind out of Japan, yeah? Uwe Henson: Yeah, well, we've just seen the market breaking news, basically Kyoto, which is a reputable news agency in Japan. They basically got the news out that Iran has informed the Trump administration that they will reopen the blocked Strait of Hormuz within seven days if it accepts demands such as lifting the US military blockade of uranium ports. So that's really just sent the market a bit of a tailspin. We got Brent crude at this point in time, just briefly below 1990. Uwe Henson: Yeah, well, we just seen the market just briefly below $99. We were trading close to one or two earlier. So we'll see. It's happening at an interesting time. We got the UN General Assembly in New York this week. And we could also imagine the kind of pressure that the Trump administration is currently seeing from voters with high diesel prices and also from Republican members of the Congress. So we'll see. It's potentially happening at an opportunistic good time in terms of getting an agreement through, but let's see. Yeah. And you wonder, this is the whole requirement around the maximum pressure regime that the US was having against Iran. No negotiations. We're just going to shut you down economically. Is it good enough terms? Is the pressure high enough politically ahead of the midterms? Interesting overture. It could all flip immediately if Trump is defiant and says, "There's no way in heck we're going to offer any kind of deal." I don't know. What are the US terms that are going to get them to say yes to this? Uwe Henson: Exactly. And you can. Potentially, the more. There's going to be, I don't know, I don't know how long it's going to take. I don't know how long it's going to take. But potentially, the American side could potentially see this as a sign that the Iranians are getting ripe for some kind of a deal, simply because oil is now flowing out of the Strait of Hormuz in increased quantities. Saudi Arabia has quietly been telling refineries in Asia that they will be ready to export again from the eastern or the western side within a relative short period of time. And all along, Iranian ships are not leaving the Strait because of the blockade. Uwe Henson: Yeah. Uwe Henson: So it could potentially. Uwe Henson: Yeah. Uwe Henson: So it could potentially indicate that the U.S. is getting the upper hand on this in terms of who gains from the oil that comes out. So we'll see whether U.S. are willing to accept it or actually feel that it's going their way. Uwe Henson: Yeah. I just think. I don't know what'll happen the next day, week, hour, but it feels to me like there's always going to be a problem for this to get re-aggravated as long as this Iranian regime remains in place. Uwe Henson: Yeah. Uwe Henson: And as long as they, as part of that, have power over this mysterious nuclear material and the fate of that. But it's really cool to get the update. And the market reaction is the yen is firming up quite a bit right at sort of existential levels there locally when it was pushing up towards that 158 level earlier in the session. And we have. I don't know what gold is doing, but we have. Uwe Henson: The three pounder. Uwe Henson: The dollar is still quite firm elsewhere outside of that dollar/yen trade. And then we have, of course, interest rates have gotten punched back lower after you're really pushing at the high end of the range here today. So, and then oil obviously sharply lower and gold. Uwe Henson: Exactly. Gold was testing 4,300 earlier in the session. Now the last I looked was it's bounced back up to 4,330. It's currently stuck in the $100 range, 4,300, 4,400. Uwe Henson: Not a huge reaction. I'm going to give you a live price here. Not a huge reaction there. Okay, cool. Thanks, Uwe. And now we'll get back to the earlier recorded podcast. Enjoy. Uwe Henson: Hey, everyone. It's Tuesday, 22nd of September, 2026. And you're listening to AMX. And notwithstanding my stance of being cautious yesterday, we had an absolute explosion higher in risk sentiment clustered around Meta's muse and this pace of downloads and the enthusiasm that sparked across parts of, and I emphasize parts of, the semiconductor space. So those that are very specific to and relevant for the implications of the needed sort of hardware/data center build out to, you know, increase infrastructure. If Meta's muse, Metamuse, I keep wanting to say Metamucil, which is something you take if you have problems going to the toilet in the U.S. But Metamuse, the, of course, AI personal agent that is topping the app download stores and the implications for that if they need to explode, again, the infrastructure. I'll get to that whole cluster of things in a moment. I've got actually pretty solid coverage today. I went down the full AI investigation research and news rabbit hole to sort of piece together what's going on. But short and headline terms, we have the NASDAQ was up, the NASDAQ 100, that is, was up 2.83%, 838 points, leaving us only about 280 points on the cash index from the all-time highs there. S&P 500 up almost one and a half percent. The broader market was, you know, positive but not nearly as positive as there was a lot of focus on the mega caps and especially big, some big semiconductor names. AMD, in fact, is one of the biggest semiconductor companies in the world. And in fact, joining the $1 trillion club was a big headline being touted everywhere. But the S&P 500 equal weight up a little over half a percent. Russell 2000, similarly, up. And the SOX semiconductor up all of 4.3%. Pretty incredible stuff. COSPI, quite interestingly, I'm not sure if it was closed when I looked at it last. It was getting close to the closing bell in South Korea. It gapped higher to sort of incorporate the enthusiasm from the U.S. session. But end of the day, around unchanged. And that's quite interesting, given that, you know, these hardware stocks have been some of the superhero stocks on the prior big wave of advance in momentum AI names linked to hardware. And you're going to need a lot of inference to do what MetaMuse is doing or Meta's Muse is doing and what the infrastructure required to run it. But that was not the focus. And I'm wondering if how much of this news item was traced or sorry, this market lack of enthusiasm for MetaMuse. memory names was linked to this Acer CEO statement overnight that memory prices, he said, will begin declining as soon as the first quarter of next year. He's saying that this Chinese memory provider, CXMT, can start competing and that the PC prices would be actually dropping next year. And the memory makers are drumming up this, you know, the specter of shortages out into the future, of course, to encourage their very high margins, which it's just a very interesting setup. Again, that sort of off note relative to the enthusiasm for other parts of the semiconductor space, CPUs and otherwise. And so I guess let's get into it. So what, you know, Meta's Muse, it's topping the app download stores. I can't remember what the pace was or the specific numbers and apparently getting some pretty decent reviews. Meta was up 11%, but some of the other CPU names, again, on the, what, how Meta is, the Muse app itself is run in the cloud, the CPU names, and this is not personal CPUs, importantly, this is server CPUs, because what happens is when you have, when you fire up this Muse agent to do something for you, you're essentially, as far as I understand, a virtual machine is what it's called, is created in a CPU in the cloud somewhere, and so you get your dedicated virtual machine. How many virtual machines can a CPU run? Well, that depends on how, you know, how much activity is needed from it, but, you know, we're talking about if you have 192 thread server CPU, it could be running several hundred agents in parallel, but still, we're talking about this is a Meta app, meaning their potential user base is obviously tremendous. So in the tens of millions and hundreds of millions of users in all, I don't know how many that might be simultaneously. So you have this. It's a Meta reacting itself, but some of the top gainers were Arm, Intel, AMD, et cetera. And that's on there again, their server CPU business. And why did Arm top the gains? It's because Arm is behind the next generation of NVIDIA's architecture. So NVIDIA has its own GPU, of course, the Blackwell, and that's been the focus for that company, but it has to pair that with the CPU, which for the Blackwell generation is Grace, for the Rubin generation. So Rubin's, the Rubin GPU chip, it'll be the Vera chip, which is designed by Arm and Arm gets a licensing fee for that. And in fact, it's licensing and it's been growing quite well because of its association with NVIDIA systems and the next generation, again, Vera Rubin setup means that they get licensed from the Vera chips and any sales of that. But as well, we have, because NVIDIA is reaping so much from, from the major cloud and infrastructure and data center providers and hyperscalers, everybody's trying to compete in this space to provide their own, uh, CPU, uh, you know, based systems together with the inference to, you know, avoid sending all that, uh, all of their investments or CapEx into NVIDIA's pockets. So you have Amazon with this Graviton, and that's an ARM-designed CPU, Graviton chip. Microsoft has its Cobalt chip, and Google has its Axion chip. All those are CPUs, by the way, all requiring ARM license fees. And then they pair them with their own inference setup. So Tranium, in the case of Amazon, this Maya setup apparently with Microsoft. I wasn't really familiar with that one. And the TPU, which we've covered a lot here in the case of Google. So that's what's behind ARM's outsized reaction there. But Intel, presumably as still the current dominant provider of CPUs in the cloud, is still benefiting with that 12.1% advance. And AMD also saw a 10% advance, again, joining that trillion-dollar club. So that's what's behind the enthusiasm into the specific companies that would benefit if suddenly there's a need for even greater hyperscaling linked to demand. For MUSE services, kind of makes sense. You know, this agentic AI, you know, maybe for the average user out there, it seems abstract. What do I use it for? Open Claw, it's kind of, it's like open source. People that are only like enthusiasts might be willing to take risks on something like that. But, you know, something coming from Meta, again, the installed user base is absolutely massive. And it's just, there's less friction in terms of, oh, let's try Meta's latest app. Maybe it can do stuff for me. And that's it. That's, yeah, that's the big market reaction here. Leaves us very close to the cycle highs. It's hard to say now that we can't see the U.S. equity index go to new all-time highs, given that we're so incredibly close now. And by the way, there was a secondary cluster of stocks that did really well yesterday. And I was also trying to figure out what was going on there. I found it rather interesting. And I really needed some answers just because of the size of the move. And it's actually somewhat related to the MUSE news, but not really in the first instance. And that was Akamai. So the sort of CDN company, and that's a content delivery network. So Akamai's traditional business was simply like, oh, you want to see a server or a web page or some content. That can be expensive in terms of latency and in terms of time to get that off of some geolocated server if that's far from the user. So they have like this idea of a very good edge presence all over the place so that the user can get a copy of that. Very close physically to where they are demanding it. So close to your home, close to whatever. So you're not sending it to a server. Let's say if I'm sitting here in Denmark, I'm not sending it to Germany and waiting for requests. But they could have copies of this content here closer to me somewhere in Denmark. Well, they're getting a big AI angle. They're claiming it at least. In fact, the CEO apparently was out. I'm not sure if it was yesterday, but saying something very recently along the lines of we're an AI infrastructure company. A very different look for a company that supposedly was doing this. Still growing, but maybe somewhat humdrum business of content delivery. But if you look at what's going on, they have a strong cybersecurity presence at the edge. And some of that is related to ensuring that the request is coming from a legitimate source, maybe preventing some abuse or whatever. But also for low latency in AI applications. So let's think about a voice agent. You need the turnaround to be very, very quick. Or if some agent is doing a 23. 30 step process and needs the turnaround to be quick. So they're actually building their, in some cases, Blackwell-based architecture presence and data centers right out there close to the edge. Obviously in far less massive configurations than the hyperscaling data centers. And their CapEx is set to increase quite significantly in the coming quarters here. So this, again, one of these sort of aha moments about the company becoming a bit more AI driven. And apparently there was quite a large shortage. There was a lot of short interest in the stock as well and heavy call buying yesterday. So this is not a recommendation, but it's a super interesting reaction from what was a very quiet stock before it blasted through its 200-day moving average. An interesting story. And some of the linkage as well from Akamai's very specifically strong day was from Fastly. So the company that is sort of a, I don't know how to sort of describe these companies, but also sits there at the edge, sort of provides edge security. They're out with a new product, essentially sort of serving. As a way to ensure that your systems are not being overwhelmed by some agents, whether it's malicious operators trying to pound your systems with requests, denial of service. Similarly, if you have an API set up into your systems, that there's some kind of related product or API security overlay. And just basically a system or a network of systems to sort of deal with this whole new angle. Of how AI is impacting the edge. All the requests and processing coming in and out of your systems is linked to AI and agentic activity. And in fact, the company said that AI traffic has increased six and a half times from January to May relative to last year and is now more than 50%. So machine-generated traffic is now more than 50% of their overall traffic they're seeing on their network. So maybe a related cluster. And you can imagine if. Muse is doing more agentic traffic and requiring more presence closer to the edge that this could. There was no linkage in the news, but I imagine there may be an angle there as well related to the Meta's Muse app. All right. And then finally, in this whole space, Meta and Amazon have been falling out over the ability of Muse to shop on the Amazon site. So basically, Muse would be able to, if you gave it a request, and Amazon doesn't. Shut it down somehow to say. You could say, go to Amazon and buy XYZ or go shop for XYZ. And if Amazon has the best price, you can use my credentials and basically go log in and buy it. A very interesting story. I'll put a link to a story on this in the podcast episode description. It's basically about who owns the storefront. If you're just saying, look, I know I want this latest flat screen TV with this model number. I don't really care. I've heard this is the good one. Yeah. Just go out and buy whoever has the best price among my list of 10 preferred providers, whether it's Walmart or Amazon or anybody else. Best buy, who knows? And then it could go do that. And then Amazon loses the whole sort of interface, customer experience angle on things. Who is sort of the storefront here? Very titanic. A couple of companies battling over something like this. Apparently, they're in negotiations. But for now, Amazon has shut down. And Meta's Muse ability to access it, at least it tries to determine if it is Muse doing the shopping. It's not 100% certain that it can do so. And then shuts down the session based on that. All right. But so much is going on. We got some relief yesterday in the form of as well, I think, helping as a tailwind, a chunky sell-off in crude oil. Not really helping product prices. And you have headlines like, quote, the next inflation shock is $1 million per day tankers. It's getting difficult. And it's expensive to ensure that your crude oil cargoes get from point A to point B for sure. And tankers isn't even the problem. It's the refined products far more so. Two tankers, in fact, were hit in the Hormuz Strait. I believe it was yesterday or at least overnight, if not yesterday. And diesel prices are still pinned near the highs of the cycle. Even louder noise is now in the U.S. among GOP senators, obviously looking for some relief ahead of the midterm elections to embargo U.S. But the U.S. is still looking for some relief ahead of the midterm elections to embargo U.S. A conglomeration of companies from Brazil, EU, Canada, maybe the U.K. and Kenya on some kind of path for middle powers. And we've seen the big spat between the U.S. and Canada. But Trump, there's some I haven't seen. I just saw the headline. I don't know the details. Trying to tout some kind of potash deal with Belarus. Belarus potash is a critical fertilizer that they have a massive supply of that. And Belarus, so does Canada. I guess there's the Trump administration looking for ways to put the squeeze on Canada to come into alignment, as Mexico has pretty thoroughly done. Mexico has seen the light, knows the writing on the wall, to use another metaphor, and is basically just trying to negotiate the terms of being subsumed under the U.S.'s sort of geostrategic strategies here. Canada is putting up a fight, trying to operate. in the world that was, let's see how that plays out. And, you know, by the way, I'm not really picking sides here. I understand fully the Michael Every playbook in a new world of these profound rivalries between key powers, the U.S. versus China, and how the U.S. side might find it unacceptable that Canada can sort of operate in this globalized, neutral world. It can just choose its trading partners willy-nilly. It doesn't need to provide a defense umbrella or participate significantly in that, just assuming passively that the U.S. does so. So I get, like, the Canadian perspective of wanting to choose its own way, choose its own freedom. On the other hand, I understand the U.S.'s feeling of insecurity and feeling like it needs to have hemispheric hegemony. Whereas I understand Canada's objecting to the bullying ways that some of that agenda has been presented. Especially by Trump's persona personally, et cetera. So just interesting to watch. Not choosing sides, but I suspect the U.S. agenda wins out in the long run. The question will be how and if it can be done in some more friendly way. Okay, and then we have, you know, what's been pressuring market or what, you know, should have been pressuring markets, one would have thought. But as taking a breather, we saw the sort of 10-year rates in the U.S., 10-year treasury yields, that is, coming off a little bit, I think, a little bit of sympathy there with crude oil prices doing likewise. But at the front end of the curve, we're, you know, we saw the yields bumping back up to the cycle highs and going actually to new cycle highs here today, 4.77% before I came in here to record the podcast on the U.S. two-year treasury. There is an auction up later today. Curious to see the demand for that. We have a non-voting Fed member yesterday talking about the need for a steady string of further hikes to avoid having to hike by large amounts later to get ahead of inflation. I guess as long as the 10-year is a little bit stable here and not breaking, especially not breaking with high momentum above the 5% level, that stocks can kind of do their own thing. I suspect, you know, how high stocks can go if we're going to see yields continue higher here will be attenuated by any 10-year yield going, you know, for example, towards 6%. By the way, that St. Louis Fed president who was the Fed speaker I was referring to. He also said that he didn't think that yields were even restrictive yet. Tell that to the treasury that is paying record amounts to service the U.S. treasury debt. But anyway, that's the setup. And, you know, I still think that the 10-year is something that's really critical to watch here. Now, how it's feeding into FX, we have the dollar affirming. I think the strong stock market actually helps out in addition to the higher U.S. yields with flows at record levels, you know, as a percentage of U.S. GDP. Inflows, that is, net inflows into U.S. equities. Dollar-yen getting back up towards uncomfortably towards that 158 level. I've talked about the sort of existentially important local resistance there, 158.40 to 50 range. Euro-dollars getting to new lows locally here below 114.50 just before I came in to record and the dollar firm across the board. We had a bit of a firmness in the New Zealand dollar overnight. The RBNZ governor was talking up. We had inflationary risks and the need to do something about it. And that saw – this came at an interesting time because we had just seen Aussie Kiwi bumping to new highs for the cycle and stretching all the way back to something like 2013. Getting close to 125, not quite getting there, and now down more than a figure from that overnight high. So pretty strong reversal there. Let's see where it leads. And yesterday, talking about other reactions, I think the yield's a key driver here. So we're seeing bifurcations. We see gold under a bit of pressure and starting to look ugly again, especially if it drops – it's dropped to 4,300. Still doing reasonably well given the headwinds of a stronger dollar, high yields, et cetera. But dropping back towards the 4,300 area and maybe 4,250 in those lows just before there. Really the last gasp if it is going to risk a further retrenchment to the 4,000 area. But a very different look in the crypto space where we saw an explosion higher. Resistance was cleared. That 82,800 resistance in Bitcoin, it traded well above 85,000. Intraday was up something like $6,000 on the day at one point before finding some resistance. So crypto is a new territory. And what seems to be the case in many of these rallies is it's a very concentrated burst, very impulsive burst higher, followed by a lot of range trading. So how quickly, if that's going to be the pattern that repeats, how quickly do we settle back into the range might be the key here. Okay. For the crypto space. And that really takes me to the end of the podcast. There's so much to look at right now. We have stocks on the bid. Oh, by the way, Germany, France, the yield spread still in focus. Lots of German political woes at the moment. It dipped back towards 100 basis points. That 10-year yield spread has widened back out to 105 basis points. It could be at the root of the next round of EU sovereign debt, an aggravated situation. There. Let's see if it's a slow fuse or a fast one if this continues to widen. And switching to the links that I will look at in today's podcast episode description, putting those out for you, there's a good eurointelligence.com link, I assume written by good old Wolfgang Münschau himself, on the situation with the CDU and how they might be finished. And that these results and Mecklenburg-Vorpommern, and maybe elsewhere, I'm not quite sure, are encouraging the SPD, which is still polling nationally. I'm not quite sure. You can get a hold of it without being a subscriber, but it's a good title here. Meta's Muse is better at surveilling me than helping me. I'm a bit skeptical. I'm in absolutely no rush to download this thing. I don't know what your opinion is out there, but is this a big curiosity download or is it because people are actually finding this super useful? And then there is the, this is, I mean, this guy has said this many times before, Mark Spitznagel, who I find a fascinating figure because he says, somebody unlike Nicholas or Nassim Nicholas Taleb himself, whose, whose writings I really enjoy reading and his philosophy, I really find inspiring in many ways. His interesting persona aside, he's not really participated in, in, you know, the markets since back in the day. Whereas Mark Spitznagel is a Taleb acolyte who is sort of doing applied black swan, applied black swan and fat tail theory really in his, in his fund. And quite successfully. So, especially when the market is, is moving crazily. So the pandemic, it was reported, he made something like 3,600% over that episode. But anyway, he's calling for one, the quote unquote, one last rally before some sort of more catastrophic download. But he doesn't really care because his approach is to make money in both directions. Doesn't really get specific on how, but I always like listening to this very interesting character. The last couple of links, it was really FT Alphaville hitting it out of the park. On the, on the link collection today, they had that Spitznagel link as well. And there was another one, you know, be careful about how you approach AI writing stuff for you because people can detect it and people don't want to read it. If you're using AI writing is the argument from this very thoughtful article. And then there's a super interesting one from, what is it? PML's Macro Focus. That's the name of the sub stack. Something I just hadn't spent enough time on, but this recent news. After the Thursday Bank of England meeting last week in which they announced the six month pause and doing for the QT and permanently stopping the longer term. Or I should say sales of the longest term guilt. He argues this is a move essentially into the phase of fiscal dominance and the Bank of England surrendering its independence. I think that's a, just as a really umbrella and sort of the directionally, certainly what looks like is going on with the Bank of England here. And this revives maybe dipping back. Into this whole rhetoric around the notion that central banks are losing their relevance. And we do need to consider these types of angles on where policy is headed. So I didn't get a chance to read the whole article, but it looked very interesting. And I think you might find it so as well. And that takes me to the end of today's podcast. A very interesting setup with this explosion higher in pockets of the AI trade and the overall averages with some big market cap heavyweights helping to drive that. Even if the equal weight index and the Russell look in very different places. Technically at the moment, let's see where this heads. Is it going to be a, you know, extending these divergences as the enthusiasm sloshes all back into AI related names, or could we see a more broad advance? I don't really know. But let's keep an eye on that. Keep an eye on those longer term interest rates, which are a key pressure point. If they continue back higher and it would be very, very unwelcome if we were to see a crude oil price, but even more so an aggravated price rise in refined products in particular. Yeah. Diesel, which risks sort of speed limiting and reducing actual economic activity levels on the ground if it continues any higher from here. There's quite a mix of stuff going on. We've got the UN geopolitics in play as well through that Thursday Xi-Trump meeting. We'll be keeping an eye on that and talking about that too. So stay careful. We'll be back soon with the next Saxo Market Call. This has been the Saxo Market Call podcast. Thanks for joining today's episode. We're always happy for your feedback and questions of all kinds. To reach out, you can drop us an email at marketcall at saxobank.com. That's marketcall at saxobank.com. Saxo. Serious trading worldwide. you